1. (SBU) SUMMARY: As requested by the U.S. interagency committee
reviewing the Generalized System of Preferences (GSP) benefits for
the Philippines, the Ambassador and key mission officers raised with
an array of senior Philippine officials USG concerns about the
protection of labor rights for Philippine workers and possible
extra-judicial killings and abductions of labor leaders and
activists. The Ambassador discussed USG concerns directly with
Labor Secretary Arturo Brion, who voiced appreciation for U.S. views
and agreed to give the recommendations full and careful
consideration. Other senior mission officers discussed the GSP
demarche in detail with officials from the Departments of Foreign
Affairs, Interior and Local Government, Justice, Labor and
Employment, and Trade and Investment. Comments from Philippine
police and justice officials indicated a willingness to expand the
mandates of police and prosecutorial task forces investigating
extra-judicial killings to include labor activists. END SUMMARY.

2. (SBU) The Ambassador raised USG concerns about labor rights
protection and the alleged extrajudicial killings of labor leaders
directly with Secretary of Labor and Employment Arturo Brion on
February 7. Noting the importance of GSP benefits to Philippine
workers and industry alike, the Ambassador highlighted for Secretary
Brion the key points of the U.S. interagency demarche, stressing the
importance of resolving concerns about possible extrajudicial
killings and the importance of expanding labor rights for Philippine
workers. Secretary Brion, well aware of the ongoing GSP review in
Washington, noted his commitment to resolving the matter and voiced
appreciation for the USG's views.

3. (U) In a February 13 meeting with Polcouns, Department of Labor
and Employment (DOLE) Undersecretary for Trade Relations Romeo
Lagman expressed strong appreciation for the trade benefits enjoyed
by the Philippines and said that DOLE would work closely with the
USG to clarify concerns over labor practices in the Philippines. He
stressed the Philippine government's commitment to International
Labor Organization (ILO) standards and underscored his Department's
strong support for Philippine workers and its close cooperation with
mainstream labor unions. He pledged that DOLE would provide the
Embassy with necessary labor statistics to help present a full
picture of the labor situation in the Philippines. Contrary to the
perception that the right to organize is not observed in special
economic zones, Lagman noted the presence of 33 registered unions
currently operating in the zones.

4. (SBU) Regarding the Labor Secretary's assumption of jurisdiction
in labor disputes, Lagman stressed that the Philippine government's
interpretation of "essential services" is in full compliance with
the ILO standards. He noted that the ILO regulations provided
latitude in defining "essential services." He added that a strict
definition of essential services would require an amendment to the
Labor Code, which would take time, given the slow pace of the
legislative process. Lagman argued that the Department of Labor had
not abused its discretion in assuming jurisdiction over essential
services disputes and added that, in many instances, both labor and
management requested DOLE's intervention in these cases. He
expressed some frustration that the international community listened
to the militant groups without hearing the government's side of the
issue.

5. (SBU) While acknowledging USG concerns about contract employees,
Lagman noted that, under Philippine law, regulated subcontracting is
allowed for non-core functions, including seasonal workers in
certain industries. He also added that DOLE plans to conduct an
"inspection blitzkrieg" on firms that employ large numbers of
contract laborers. The inspections would begin within the next few
months in three regions, including Metro Manila.

6. (SBU) Lagman said that the ILO's offer to send a technical
mission to visit the Philippines to review workers' rights
protections is under consideration, noting that the matter is
ultimately for President Arroyo's decision. He said he would relay
to DOLE Secretary Brion the USG's support for an ILO technical
mission.

7. (U) While noting that the issue of extra-judicial killings did
not fall under the purview of the Labor Department, Lagman said that
he would convey to Labor Secretary Arturo Brion the USG's
recommendation that the mandates of both Task Force USIG and the
Justice Department's prosecutorial task force be expanded to include
the disappearance or death of labor leaders and activists.

8. (U) Marius Corpus, Undersecretary for Public Safety at the
Department of Interior and Local Government, which oversees the
Philippine National Police, reiterated the government's commitment
to investigating extra-judicial killings, including those of labor
activists. He pledged that his department would continue its
efforts to investigate charges of extra-judicial killing. General
Jefferson Soriano, the head of Philippine National Police (PNP) Task
Force Usig charged with investigating extra-judicial killings and
disappearances, stressed to PolCouns on February 11 that he would
support expanding the mandate of Task Force Usig to include
investigating the killings or disappearances of labor leaders and
labor activists. Soriano said that although labor killings do not
fall within the current mandate of his task force, he had instructed
PNP regional offices in January to begin compiling statistics on
labor killings and submit a report not later than February 15. He
expressed hope that he could provide the Embassy with a consolidated
report after the Easter holiday.

9. (U) General Soriano said he was also open to including labor
killings in the official mandate of the task force and had
instructed his staff to prepare for PNP Director Razon's approval a
position paper expanding the task force's scope of work to cover
labor leaders and activists. In the meantime, Soriano assured
PolCouns that the PNP would pursue labor killings with the same
persistence as the other EJKs.

10. (U) The Justice Department official in charge of the special
prosecutors investigating extra-judicial killings also expressed
support for expanding the prosecutorial task force's mandate to
include cases involving labor leaders and activists. Undersecretary
Ricardo Blancaflor said that he has the authority to expand the
mandate of the DOJ Task Force on Human Rights and Extrajudicial
Killings, currently composed of 12 prosecutors, and said he would
weigh the issue carefully and inform the Embassy as soon as possible
on his decision. Blancaflor fully recognized the level of concern
of the international community over the question of extra-judicial
killings, while stating that not all the deaths and disappearances
cited by militant labor and political groups could be attributed to
government security forces. Most of these incidents resulted from
personal and political disputes among activists and the Philippines'
several insurgent groups, especially the communist New People's
Army, which had carried on a violent, decades' long fight with the
government.

11. (U) In a discussion with the Economic and Political Counselors
on February 13, Department of Trade and Investment (DTI) Senior
Undersecretary Thomas Aquino made clear that he fully understood the
gravity of the GSP review and the potential economic impact for
Philippine workers and the economy. While noting that DTI did not
have any direct responsibility for labor issues or extra-judicial
killings, he promised to draft a letter to his DOLE counterpart
outlining the trade ramifications of the GSP review and urging the
closest possible cooperation with the USG.

12. (U) PolCouns also informed the Department of Foreign Affairs
(DFA) about the GSP review, noting the potential impact on a wide
array of bilateral ties. Undersecretary for Special Concerns Rafael
Seguis had been briefed by the Philippine Embassy in Washington on
the issue and recognized the importance of the review. He said DFA
would reach out to other concerned departments to discuss the
Philippine government's response.

COMMENT
-------

13. (SBU) The Ambassador and senior Mission officers will continue
to raise USG concerns about extrajudicial killings and labor rights
with Philippine government officials and will underscore the
importance of concrete government actions to ensure continued GSP
eligibility. While the government's willingness to review the
mandates of its police and prosecutors task forces on extrajudicial
killings is a positive step, Post remains concerned about the
Department of Labor and Employment's interpretation of "essential
services" on cases for assumption of jurisdiction and will continue
to press DOLE to review these policies.

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